Ranger Direct Lending, which listed on the London Stock Exchange on 1 May 2015, has announced its annual results for its initial period from 10 April 2015 to 31 December 2015. During the period, the company’s NAV grew by 2.45%, whilst its share price grew by 2.50%. The company also paid 8.36p per share providing a return on the principal amount invested of 9.36%. Ranger says that this is in line with its target of to achieve 12 to 13% targeted net annualised returns on investments. The chairman’s report describes the period as one of consistent progress for the company, both in terms of NAV growth and in fund deployment, which culminated with a secondary issue of 1,348,650 new ordinary shares at a premium to NAV, in December, enlarging the Company’s share capital by 10%.
Ranger’s board say that, as at 31 December 2015, all of its assets were deployed, or committed to be deployed, in Debt Instruments issued by Direct Lending Platforms, less approximately 5% for general fund operations and foreign exchange settlements. The board also say that this has resulted in a steadily improving rate of monthly NAV growth and dividend yield over the period. The company says that more than 80% of its portfolio consists of secured loans across a diverse selection of industries and whilst most of the assets are in the US, three of the recent investments have been in platforms based outside the US. They say that there has also been progress towards making tactical equity investments in Direct Lending Platforms and that they expect several to be completed by the end of the second quarter of 2016.
Ranger paid its first dividend in December 2015 and now that its capital is effectively fully invested, the Company says that it will seek to achieve an increase in its quarterly dividends through 2016. However, the company says that, as envisaged at the IPO, payment of the 10% targeted annual dividend will be contingent on securing appropriate leverage and discussions are continuing on the structure of an appropriate facility, which they hope will be in place by the end of the second quarter.
The board say that the IPO was capped at £135m to ensure a prudent and timely deployment of the proceeds but that it remains committed to growing Ranger. They also say that discussions with the Investment Manager tell them that the direct lending sector still offers compelling value and yield. They say that the continuing reluctance of mainstream lenders to offer attractive finance to SMEs means that there will be further opportunities in 2016 and Ranger hopes to be able to raise new capital to take advantage of them.
Ranger Direct hopes to raise new capital to take advantage of SME lending opportunities : RDL